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What Are Procurement and Compliance Professionals Most Worried About?

07/23/2018 By

Although procurement and compliance professionals from the U.S. and the U.K. are largely confident in the effectiveness of their functions, they are concerned about the risks and challenges posed by regulations, technological change and fraud.

These findings come from Dun & Bradstreet’s 2018 Compliance and Procurement Sentiment Report, based on a survey of more than 600 procurement and compliance decision-makers. The respondents represent a wide range of industries and revenues.

Around two-thirds (65%) of the respondents say that current regulations have increased the risk to their business over the past three months, while 53% report that these regulations are also preventing them from doing their jobs effectively.

“We’re seeing regulators put more pressure on compliance and procurement professionals now than ever before,” says Brian Alster, global head of supply and compliance at Dun & Bradstreet. “Matters relating to GDPR, OFAC and FinCEN/money laundering regulations continue to make headlines, underscoring the real need for companies to know who they’re doing business with.”

He continues: “In this environment, it’s not surprising that some respondents see regulations as a barrier to doing their jobs effectively, yet those regulations are essential to help ensure they’re not only compliant, but that their actions are in line with accepted business ethics as well.”

Another pressing concern is fraud. Fifty-five percent of the respondents say that their companies have experienced fraud in the past two years, and among these respondents, an overwhelming 88% say that fraud has affected their company’s brand.

Source: Dun & Bradstreet

A relatively smaller percentage of respondents (36%) say that technology is a barrier to success. Nearly three-quarters of these respondents have also experienced fraud. “The feedback from these respondents highlights the need for an effective technology infrastructure to support a risk-based approach and aid decision-making,” the authors of the report write.

Despite these worries, the respondents are overall optimistic, with 93% reporting that they are confident in the current effectiveness of their companies’ procurement and compliance functions.

They are certainly not technologically behind. Eighty-three percent of U.S. respondents and 68% of U.K. respondents say that they are “familiar” or “very familiar” with artificial intelligence (AI) and automation, with 73% of the U.S. respondents and 58% of their U.K. counterparts reporting that they already either have an AI or automation process in place or will be implementing one in the near future.

Looking to the next six months, these professionals cite customer/vendor due diligence; internal training on regulations; ongoing supplier and vendor monitoring; and implementation of a risk-based approach as their top concerns.

These objectives differ slightly by geography. U.S. respondents are more likely to cite vendor management as their top priority for the immediate future, whereas U.K. respondents are more concerned with preparing for current and future legislation.

Ultimately, the professionals who feel the most prepared for existing and new regulations are those whose responsibilities span both procurement and compliance. Among this group (which makes up 30% of the respondents), 96% say they have the resources to meet existing and future regulations, and 94% say that they have the necessary support to implement new policies as needed.

Alster says that supply chain is an area that can be managed to mitigate business risks.

“As I see it, using the right data and analytics tools can achieve the four keys to creating and maintaining a compliant supply chain — ensuring your supply chain is diverse; thoroughly vetting with whom you’re doing business; creating an efficient onboarding process; and monitoring suppliers on an ongoing basis,” he says. “By doing these four things, procurement officers not only stay compliant, but also help the business maintain supply chains that are less susceptible to disruption or corruption.”

The full report is available for download here.